People claim that we are now in a “new market,” but recessions are always a possibility. Millennials don’t know where they will be in their lives when or after they make a commitment to buying a home, and the effects of a recession with owning a home seem to outweigh the other benefits. Millennials are also not educated enough on homeownership. The long-term benefits of owning a home will not be evident if people buy homes that they cannot afford. Homeownership is not for everyone, and renting could be a better option for more Millennials and their ways of living.
Accidents, identity theft, loss of a job, many things can happen to a person putting them in not only in a bad situation personally but a bad financial situation. Mortgage companies are allowing families to take out mortgages that they may not be able to pay back if something were to happen in their family. There are many different options to consider, but one way to help fix this problem is raising the estimate family income for a mortgage. This would be difficult for some families that are trying to get a more expensive home but it will help them too by avoiding foreclosure. If they were to decide on a cheaper home that would mean a smaller mortgage and less they owe someone else.
I believe this plan will decrease the percentage of foreclosure and help people keep their homes. An extended payment plan for eligible people is one idea but what about people who aren’t eligible? What about the people who simply can not afford to pay their mortgage or afford a down payment on a cheaper place? Or what about the people who have bad credit or no credit due to an unfortunate event such as identity theft? Many people put a lot of money into a home, then some incident comes along making keeping up with payments more of a challenge, but is it really unfair that their home ... ... middle of paper ... ...e doing the responsible thing in the process, the amount of missed payments should affect credit because the Person didn’t immediately take the actions necessary when they knew they would soon find themselves in a financial hole.
Although the insurance is used to help the mortgage company in case of default, it can be an unnecessary burden on the homeowner. The elimination of the insurance will reduce the payment by a minimum of $100 each month. That will help the homeowner tremendously in both the short and long term of the loan. Finally, the lenders should make sure the homeowner can afford to pay for the house they are interested in. So many people were placed in houses that were well above their means but because of greed this has caused a lot of people to lose their homes.
I have seen and heard many people complain that when they attempted to get assistance from a company that is supposed to get them out of the foreclosure problems they are charged a large fee. A fee that they do not have. Now they are back to square one trying to figure out how to get out of the crisis. All the thousands of foreclosed homes should be offered to the home owner that have lost their homes. It should be a rent to own but at an affordable price.
One of the mistake is people are going out and getting there dream home that they can not afford . And then people spend too much money on miscellaneous items. As I walk home from school I notice that mostly every house in my neighborhood has at least one brand new car in the drive way. Then I thought to myself if people wasn't so high maintains and not always trying to keep up with the Jones they probably could afford their mortgage and there wouldn't be so many foreclosures. I researched and came up with the hypothesis that no matter how much a person cuts back and saves on their everyday living, if they still go out and buy a home to much out of the budget they would still not be able to save there homes from foreclosure.
If you are seeking to refinance your current mortgage, you should shop around for the best mortgage rates. Because the housing market is currently at rock bottom, mortgage lenders are eager to make loans to existing homeowners in order to maintain their business. There are many different attractive offers out there for those who wish to refinance... ... middle of paper ... ...s, it creates a domino effect. The housing industry has a big impact on the economy and a crash in the housing market can signify the start of a recession. No one wants a recession, so in order to give the economy a shot in the arm, interest rates began to fall again in an effort to tempt people to purchase new homes.
This mindset needs to be changed in our society because it is a stressful and deceptive way of life. Without much knowledge the public is preyed upon by those getting rich on the interest paid, along with late fees and other fines. Then, besides the mandatory modification the homeowners with a loan problem should also be given government tax incentives, credits and other incentives to stay in the home for an extended length of time. There is no short term fix for all of this of course, but I have made the proper suggestions to do away with all the brown front lawns void of Christmas decorations this year. One of them belonged to my now displaced family and the hardship is one reason I am seeking money for my education.
A moratorium on foreclosures for a year would encourage banks to negotiate short sales because they would no longer be receiving a mortgage payment on homes that were at risk for foreclosure. The reason why short sales are part of the solution to the foreclosure crisis is because many homeowners are suffering from the burst bubble of the housing market and many people currently own homes that are worth less than what they paid. The second step the President and Congress would need to do ... ... middle of paper ... ...t the prospect of several homes becoming vacant and boarded up due to foreclosures. By ensuring that people will continue to be in those homes there would be a glimmer of hope throughout the community. As we sort out the aftermath of the corruption and irresponsibility that brought us into this mess this plan also sends a message to the nation and the world that when times are tough we are not left to plummet on our own but are united to ride out these difficult times together.
The Obama Mortgage Plan, known as "Making Home Affordable," has been rather disappointing. By incentivizing banks to voluntarily modify troubled mortgages, the plan relies on these profit-maximizing organizations to see modifications as benefiting their bottom line over the long run. For a few home owners, namely small business owners and hourly employees who have seen their income diminish but not disappear, this has meant lower monthly payments which have kept thousands of families from losing their homes. Millions more have been unable to obtain modifications, however, because their income has fallen so much that the bank sees them as being unworthy of a new loan. Instead, the banks seek to continue receiving payments from the homeowner, who pays an unmodified monthly mortgage payment until such time as his or her savings as been depleted and the house reverts to the bank.